General Electric Posts Earnings Beat, But Shares Warning

The company cautioned against a "challenging" operating enviroment

Deputy Editor
Oct 26, 2021 at 9:13 AM
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The shares of General Electric Company (NYSE:GE) are up 1.3% at $106.70 this morning, following the utilities company's third-quarter earnings report. GE posted profits of 57 cents per share, which topped analysts' estimates, though its revenue fell short of expectations. The company also lifted its full-year earnings forecast, noting recovery in its jet engine business. The firm did warn against a "challenging" operating environment, thanks to supply chain issues, as well as concerns over whether or not production tax credits for certain investments will be extended in the latest infrastructure bill. 

When we last checked on General Electric stock, it had landed on a list of seasonal underperformers for July. The stock did wind up hitting a five-month low of $94.56 on July 19, though the selloff fell just short of its 200-day moving average. It looks like this trendline has helped guide GE higher during October, putting it at a 21.9% lead for the year. 

Analyst sentiment is split down the middle, with six "buy" or better ratings, and six "hold" ratings on the books. The 12-month consensus price target of $118.63, meanwhile, is a 12.7% premium to current levels. 

Options traders, on the other hand, have been much more bearish than usual. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GE sports a 10-day put/call volume ratio of 0.91, which stands higher than 96% of readings from the past year. This implies long puts have rarely been more popular during the past 12 months. 

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